Azure Sustainable Fuels Corp., a Calgary-based sustainable aviation fuel (SAF) developer, this week received $13.4 million in funding from the Canadian government to support the creation of a production facility.

SAF is a low-carbon alternative to traditional aviation fuel. The International Air Transport Association says SAF can reduce carbon dioxide emissions by up to 80 per cent and contribute to the approximately two-thirds of emissions reductions needed for the aviation industry to reach net-zero by 2050.

The investment from the Canada Infrastructure Bank and Natural Resources Canada will be used for front-end engineering and design (FEED) studies in British Columbia, Manitoba and Ontario to check the viability of SAF production sites.

Azure has raised $40 million to date from private and public sources, including $5 million in June 2023 from Natural Resources Canada and $3 million from the Manitoba government in December 2023, an Azure spokesperson told Sustainable Biz Canada in an email.

The FEED studies are expected to be complete by the end of 2024, according to Azure, setting the company up for an investment decision in the first half of 2025.

"Our ambition is to develop the first SAF-dedicated renewable fuel production facility of scale in Canada, by utilizing Canadian skillsets and natural resources to achieve first production in 2027," Douglas Cole, Azure's CEO, said in a release.

Building up Azure’s SAF network

Azure was founded by the principals behind True North Renewable Fuels, a Calgary-based renewable diesel company that was acquired by Federated Co-operatives Limited in 2021.

The company’s goal is to build a SAF facility capable of producing 20,000 barrels per day, equal to one billion liters per year. The facility will not use fossil fuels as a feedstock, instead using mostly domestic canola and soybean oil feedstock, the spokesperson said.

The facility’s cost has not yet been finalized, the spokesperson added.

A Natural Resources Canada release puts the proposed Manitoba site in Portage la Prairie. The Azure spokesperson said the ancestral lands of the Tk̓emlúps te Secwépemc near Kamloops, B.C. are being explored with the First Nations government, while the proposed site in Ontario cannot be disclosed due to commercial sensitivity.

The facility design and regulatory approach can be shared across the three projects as a growth platform, the Azure spokesperson said.

Azure says it is engaged in conversations to secure offtake SAF agreements with large Canadian customers.

Its value chain partners include:

• Shell Catalysts & Technologies as a facility processes technology provider;
• Canadian National Railway Company for rail and transportation services;
• supply chain infrastructure from Savage;
• RICHARD Design Services for engineering, procurement and construction; and
• Bartlett for feedstock.

The Canadian government invested $350 million into the Initiative for Sustainable Aviation Technology of Canada in June 2023 to facilitate the greening of the country's aviation industry.